All posts tagged News Corp.

CLSA reckons the chances that News Corp. may move to take over Ten Network Holdings are on the rise after the free-to-air television broadcaster appointed a new chief executive.

In a filing to the Australian Securities Exchange late Friday, Ten said Hamish McLennan would replace James Warburton as CEO.

Mr. McLennan’s curriculum vitae has raised eyebrows, including those of CLSA analyst Digby Gilmour, given that Mr. McLennan was a senior News Corp. executive until Friday. He is also chairman of online real estate classifieds operator REA Group Ltd., which is majority owned by News Corp.’s Australian unit News Ltd.

By airing some misgivings about a possible bid for Foxtel shareholder Consolidated Media by Seven Group, Australia’s competition watchdog may be drawing a line in the sand. The underlying message: It’s uncomfortable allowing mergers between pay-TV companies and their free-to-air rivals.

Such a position would have big implications for other potential deals in Australia’s ever-changing media landscape, particularly if companies with an interest in cable TV such as Telstra and News Corp, publisher of The Wall Street Journal, consider deals with privately held Nine Network or listed companies Ten Network Holdings, Seven Group and Seven West Media.

For the Australian Competition and Consumer Commission it’s all about access to sporting events.

All eyes are on billionaire Kerry Stokes and Seven Group Holdings after the Australian Competition and Consumer Commission said it wouldn’t oppose News Corp.’s 1.97 billion Australian dollar (US$2.06 billion) takeover offer for pay television service Consolidated Media Holdings.

Seven Group’s counter-proposal to purchase the 76% of the target it doesn’t own is awaiting ACCC approval.

The Wall Street Journal reports Thursday that the board of News Corp. has approved a plan to split the media conglomerate into two divisions — entertainment and publishing. Earlier this week, shareholders told Deal Journal Australia the move would be welcomed. News Corp. owns The Wall Street Journal.

Analysts reacted to news of a split as follows:

Goldman Sachs (Buy; Price Target A$23.10): “In our view, splitting News. Corp into two companies would enable investors to more accurately value the individual business units within the group and could potentially see the combined entity trade closer to our FY13E EBITDA sum-of-the parts valuation of A$23.10 a share,” Melbourne-based analyst Adam Alexander said in a note. “In terms of earnings contribution, it is evident that [entertainment] would be significantly larger than [publishing],” he added, forecasting fiscal 2013 EBITDA for the entertainment business of around US$6.73 billion compared to US$1.07 billion from the publishing business. The broker notes the expected fiscal 2013 EV/EBITDA multiple of global peers including The New York Times Co., Axel Springer and Fairfax Media is 5.0 times which gives the publishing business an implied valuation of US$5.35 billion.

A Wall Street Journal story that News Corp. is mulling separating its publishing assets from its entertainment businesses, drove the stock to close 2.41% higher at A$20.79 a share against the benchmark S&P/ASX200 which shed 0.4%.

“Generally speaking, spin-offs are good news because a sum-of-the-parts is often greater than the whole and they tend to liberate hidden value and sometimes generates corporate appeal for separated vehicles,” he said.

A successful bid for Consolidated Media would mean News Corp. would double its stakes in pay television entities FOX Sports Australia and Foxtel to 100% and 50%, respectively. However it would still leave it without any exposure to networks that are offered for free to viewers.

Imagine a future where Gina Rinehart takes control of Fairfax Media, News Corp. spins off its newspaper assets, James Packer sells out of Consolidated Media, Telstra takes out Foxtel, and Ten Network merges with DMG Radio or Southern Cross Media.

Too fanciful? Not according to analysts at Macquarie.

Australia is undergoing rule changes that could break down barriers to cross-media ownership as advertising markets remain weak and audiences migrate away from traditional platforms, softening up potential targets.

About Deal Journal Australia

Deal Journal Australia is an up-to-the-minute take on the deals and deal makers that shape the Australian landscape, including mergers and acquisitions, capital raisings, private equity and debt markets. In short, wherever money changes hands. Deal Journal Australia is updated throughout each trading day with exclusive commentary, analysis, data, news flashes and profiles. The Wall Street Journal’s Gillian Tan is the lead writer, with contributions from other Journal and Dow Jones reporters and editors. Send news items, comments and questions to gillian.tan@wsj.com.

Fins.com has moved

Welcome to eFinancialCareers, the number one career site for financial services.

FINS has become a part of Dice Holdings in order to improve your job search experience. eFinancialCareers will provide you with the best possible service, the best job opportunities and editorial content and the best talent. With our long track record of helping finance professionals develop their career, from graduating to landing top positions in the industry, we will continue to deliver.